Now the majority of properties in this site are appraised using the income method, and I have found that many of the properties I had researched in the past were grossly overpriced based on this info.
My question is , is such an appraisal sufficient to use as negotiating instrument with a seller or should I hire someone to perform appraisals using another method.
Ive read that the income approach is best for buyers because it directly pegs the property against how much it earns as opposed to either the cost or sales comparison approach.
Can the seller refuse to accept one approach over the other?
The closest analogy I can gather is this method is similar to the Kelly blue book and NADA. I know that some dealers outright refuse KBB as being too buyer friendly.
Are these single family homes or multi-family homes? single family homes are not appraised based on income.
That site gives you the assest value for tax reasons. In general, they are lower than true value. In San Antonio they are usually about 15% below but it varies from area to area.
Then forget the CAD value, go by the income. Majority of the properties you will find are overpriced. Just like SFHs you need to find a motivated seller or distressed property to buy at a discount.
An update:
Things are getting exciting, I have hired an appraiser and the value he’s determined for the property is 375,000$, the sellers price was almost 200,000$ more?!
This is interesting because based on my PL projection the property can yield 55,000$ annually, and netting at roughly $30,000.
Debt service on 375, 000 will ensure that this setup will just about break even, maybe even delve into the red if income tax is calculated.
So I am going to make a much lower offer than the appraised value to see what happens.
No Texas investor worth their salt will use a county appraisal for anything other than getting an idea of what they’re going to be taxed on. These are plus or minus 20-30% of the actual value and shouldn’t be used to assess value of a property.
Tax Appraisals are often below the actual value, so if you want to show it to an owner to let them know their property is overpriced, you can use it as a tool after deciding if this ethical to you. If you need to know value, try loopnet, MLS/an agnet, or an appraiser. Bird dogs and other area experts will know value as well.